Virginia Family Law Appeals

AGREEMENTS – PREMARITAL AGREEMENTS – CONSTRUCTION – VALIDITY – CHOICE OF LAW – PLACE OF CONTRACT FORMATION.

A couple of Virginia residents who entered into an antenuptial contract while in the Virgin Islands, and married there before coming back to Virginia, learned in Black v. Powers, ___ Va. App. ___, ___ S.E.2d ___, 20 VLW 1475 (4/25/06), that their agreement is governed by Virgin Islands law. After all, the place where a contract is formed generally governs, unless the agreement clearly states an intention to have some other law govern, and this written agreement did not do that.

AGREEMENTS – MUTUAL-WILLS PROVISIONS – INTERPRETATION – DRAFTING – MALPRACTICE TRAPS.

In case you needed one more thing to be paranoid about, the Virginia Supreme Court held in the case of Plunkett v. Plunkett, ___ Va. ___, 624 SE2d 39, 20 VLW 1007 (1/13/06), that a provision in a decedent’s will that was mandated by his “marital agreement” should be upheld and given effect, but interpreted in a way that was vastly disappointing to his children, and in which there is certainly reason to doubt the testator ever thought it would be construed. The agreement incorporated by reference the mutual wills that the parties agreed to make, and everything was construed together.

AGREEMENTS – ANTENUPTIAL CONTRACTS – MARITAL OR SEPARATE PROPERTY – TAX REFUNDS – OCCASIONED BY LOSSES – FEES.

In a case which would seem to turn on interpretation of contract terms, rather than interpretation of law itself, the Court of Appeals held that a trial judge correctly held that certain tax refunds occasioned by losses on husband’s separate property were in fact marital. It held the refunds to be jointly titled marital property, and hence equally owned by the parties, as the agreement provided. King v. King, ___ Va. App. ___, ___ S.E.2d ___, 20 VLW 675 (11/1/05).

Prenups -- three cases

ANTENUPITAL AGREEMENTS. In Rogers v. Yourshaw, ___ Va. App. ___, 448 S.E. 2d 884, 9 VLW 320 (8/23/94), in a result understandable only in view of the Virginia appellate courts' love affair with imputation theory, the Court upheld a rather shocking agreement, rejecting arguments that it was unconscionable and against public policy. The contract, between a law student/legal secretary and the prosperous lawyer/employer she was marrying, provided that she would have to "pay back" a huge sum upon divorce which would be calculated by totaling her non-earnings for however many years she failed to work outside the home. In fact the wife soon forgot about the agreement, and did stay home for years and raise three children. The wife also argued that the trial court should have found that the parties had abandoned the agreement long ago, and she contended that the trial court could not excise the admittedly invalid provisions of the agreement in order to render it valid. The Court of Appeals noted that the wife was not totally without some understanding of the law, and that she knew enough to seek independent counsel, but chose not to do so. The Court said that this agreement was valid whether it was governed by the new Uniform Premarital Agreements Act effective July 1, 1986, or prior case law.

ANTENUPTIAL AGREEMENTS -- FAIRNESS -- PUBLIC POLICY. A bizarre antenuptial agreement that raises fundamental questions about the basic nature and purpose of marriage is upheld by the Court of Appeals against charges that it should be overturned as unconscionable. (The agreement would appear to discourage divorce, but also to discourage with a vengeance a party's choosing to have children or stay home to raise them.) A militant feminist first-year law student, who thought that she would never have children, much less stay home and raise them, married a well-to-do lawyer from a prominent firm (where she was his secretary). To guard against the possibility that she would leave him after he paid to put her through law school, the agreement provided that if one party failed to work at lucrative employment then the party who made financial contributions to the marriage would have to be fully repaid for them in the event of a divorce or separation. The strangely-worded agreement nevertheless seems to offer no coherent formula for reckoning the amount of this liability, and the husband at trial, seeking to enforce the agreement, admitted he did not know what the wife owed him under this 1977 agreement as a penalty for staying home for a number of years and raising three children. The contract said that "if either party has a cumulative deficit of contributions to expenses, that party will make up such deficit on reasonable and mutually agreeable terms," and "the terms of such repayment shall be negotiated at the time ...." However, these were held not to be such ambiguity or vagueness as to be fatal to the agreement. Rogers v. Yourshaw, ___ Va. App. ___, ___ S.E. 2d ___, 9 VLW 320 (8/23/94). Apparently the idea was that scrupulous records would be kept, but the record-keeping was abandoned years ago. The Court says that the wife, as her future husband's secretary, should have known all about the importance of consulting independent counsel because of being a law student and working in a law firm. Since this agreement was negotiated so long before the 1986 effective date of the Uniform Premarital Agreements Act, the Court says that whether it is governed by Batleman v. Rubin, 199 Va. 156, 98 S.E. 2d 519 (1957), by the statute, or by the general principles of contract law, the agreement need not have been thrown out. Courts do not deny enforcement to valid contracts simply because they are ill-reasoned or ill-advised. Also, a transcript of a juvenile court hearing in earlier stages of this case was properly excluded from evidence as inadmissible hearsay. The contract was not abandoned, because the Court finds evidence that it was not.

ANTENUPTIAL CONTRACTS -- SET ASIDE. Carpenter v. Carpenter, ___ Va. App. ___, 449 S.E. 2d 502 (1994). Applying the pre-statute common law, the Court of Appeals upholds a trial court decision setting aside an antenuptial agreement on the ground that the husband did not make full disclosure at the time it was signed, the wife did not have counsel, and under the agreement she forfeited all her rights to her future husband's property. The Premarital Agreement Act, Code §20-154, provides that agreements entered into prior to its enactment are valid "if otherwise valid as contracts," and that is the standard that the Court of Appeals will apply to them. In such a context, the requirement of full disclosure is imposed "because of a relation of trust and confidence between" the parties under the Restatement Second of Contracts, §161(d) (1986). Parties engaged to be married, the Court says, are not dealing at arms length, and do have such a relationship. Having found the agreement invalid, the trial court quite properly went on to make an equitable distribution.